Japan’s economy could make its sharpest rebound in decades this year, Kyodo reports, with consumption picking up toward the end of 2021 as the impact of the pandemic on the broader economy eases. This scenario, however, could be dealt a serious blow with the introduction of a fresh state of emergency in the Tokyo area.

Some 72% of major Japanese companies expect the economy to expand at a moderate pace in 2021, a New Year’s Kyodo survey showed, though more than a quarter of the 109 firms in the survey said they are not sure when their sales will return to pre-pandemic levels, and 13% expect any recovery to materialize in 2023 or later

Analysts also predict that Tokyo stocks will climb in 2021 with progress in global COVID-19 vaccinations helping to improve the business climate and Japan’s accommodative monetary policies remaining in place. The Nikkei 225 average, which finished 2020 trading at 27,444.17 — the highest year-end close since 1989 — is predicted to move between 21,000 and 30,500 in 2021.

Goldman's Matsui on Japan's Economy, Stocks and 'Womenomics' | BLOOMBERG MARKETS AND FINANCE
Goldman’s Matsui on Japan’s Economy, Stocks and ‘Womenomics’ | BLOOMBERG MARKETS AND FINANCE

Just try not to think about the debt. It’s no secret that Japan is haunted by a snowballing amount of public debt that is about twice the size of its GDP. Experts say increased spending due to the current crisis is unavoidable, but Japan will need to start seriously discussing how to deal with its debt once the pandemic eases — otherwise, it may face severe ramifications, writes Kazuaki Nagata.

In the meantime, the coronavirus fallout is playing havoc with people’s livelihoods. The official figure of 80,000 jobs lost due to the pandemic in Japan is thought to be the tip of the iceberg. A record number of people are seeking support to pay their rent, while firms slashed winter bonuses by the most since the global financial crisis — cuts that are bound to hit consumer spending.

But as companies look to reshape themselves ready for life after the coronavirus, one financial job is in high demand: mergers and acquisitions expert. “We’re at the start of an era,” says Nomura global M&A head Shunichi Tsunoda. “Be it a post- or with-coronavirus era, things will change — there should be more industrial reorganization and cross-border transactions.”